Vietnam - targetted credit for safer houses

Borrowing to strengthen your house saves money

Credit programmes relate commonly to income generation activities, but the DW Vietnam experience shows that strengthening the house is considered just as important an investment. Families have both been ready to borrow to recude the risk of looses and thus be able to channel their scant savings to income genration, not repairs and reconstruction.

In Vietnam between 2001-03 DW tested the potential of making special sources of credit available to families in order for them to strengthen their home agants the risk of typhoon damage. There was some doubt whether people would contribute to and participate in the strengthening of their homes, but the experience proved that people wanted to participate in the process of strengthening through labour and cash inputs. To do this families borrow money to cover their contribution in the short term. Household surveys have also shown that because no formal credit facility existed to pay for strengthening the home, families have had to go to informal moneylenders, who charge high repayment rates. DW concluded that this caused hardship and that the project needed to demonstrate that a dedicated affordable source of credit for house strengthening could work successfully: the result is that it does.

A new credit offer for safer houses:

Supported by the Ford Foundation, since 2009 DW has introduced a new loan package in collaboration with the Vietnam Bank for Social Policy providing families with credit for house strengthening, repaid over 5 years. Families show they are keen to take this opportunity and are good at repayments. They recognise the social and economic value of a resistant safe home and the contribution it makes to family stability and growth.